"If approved, we will be adding 400 new jobs in Orrville with a payroll of $40,000,000," by moving Big Heart Pet Brands' headquarters from San Francisco to Ohio, said J.M. Smucker spokeswoman Maribeth Burns.
CLEVELAND, Ohio -- The Ohio Tax Credit Authority on Monday approved a job creation tax credit to encourage the J.M. Smucker Co. to bring 400 Big Heart Pet Brands jobs, and an annual payroll of $40 million, to Ohio.
The 75-percent, 14-year tax credit is worth a potential $16,859,000, if all the elements approved by the Tax Credit Authority are met, according to spokeswoman Stephanie Gostomski of the Ohio Development Services Agency.
In exchange, J.M. Smucker would agree to move 400 jobs to Orrville from Big Heart Pet Brands' headquarters in San Francisco and a shared services office in Pittsburgh, and keep those jobs in Orrville for at least 17 years.
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J.M. Smucker's Big Heart Pet Brands is the nation's largest stand-alone producer, distributor and marketer of branded pet food and pet snacks. Big Heart Pet Brands, which Smucker acquired on March 23, is the California-based manufacturer of popular pet foods and pet snacks including Meow Mix, Milk-Bone, Kibbles 'n Bits, and 9Lives. It is one of the nation's largest stand-alone producers, distributors and marketers of branded pet food and pet snacks.
Big Heart Pet Brands employs nearly 2,500 at offices in San Francisco, Pittsburgh, and Burbank, California; manufacturing facilities in Decatur, Alabama; Topeka, Kansas; Lawrence, Kansas; Buffalo, New York; and Bloomsburg, Pennsylvania; as well as some research and development facilities, sales offices and distribution centers.
If the project is approved, Smucker would make a $31 million investment to build and equip a research and development facility at its Orrville campus, as well as reconfigure an existing building into offices to accommodate the new jobs, said Smucker spokeswoman Maribeth Burns.
"This could be quite exciting for Northeast Ohio," Burns added.
A $40 million annual payroll for 400 jobs means the jobs would average about $100,000.
Burns said J.M. Smucker will make its final decision on relocating Big Heart Pet Brands to Orrville after hearing from local entities, including the Orrville Board of Education and the Orrville City Council, expected by Oct. 5.
The Orrville school board is holding a special meeting on Wednesday to consider the Smucker tax abatement, which could generate an extra $150,000 to $200,000 a year by 2019 for the 1,700-pupil school district.
"The J.M. Smucker Co. has been an outstanding corporate sponsor, and they just do fantastic things in our school district," said Superintendent Jon Ritchie.
The Orrville City Council, which meets Oct. 5, is expected to consider the same property tax abatement for J.M. Smucker at a future meeting, said Mayor Dave Handwerk. He said Smucker generally doesn't ask for tax abatements, "but this a pretty large project, and we're just very excited for them."
The State of Ohio will review Smucker's research-and-development loan fund application on Oct. 18, after which the company will make its final decision, Burns said. The Wayne Economic Development Council has already expressed its written support.
Rather than a straight-up tax break, "the Job Creation Tax Credit is a performance-based credit" based on the number of jobs created and the new payroll tax generated from those jobs, Gostomski said.
"Ohio is competing with Pennsylvania, Kansas, and California for the proposed project, [states] where Big Heart Pet Brands already has operations," the Ohio Tax Credit Authority said in a written statement.
"For Ohio to win the project, we must reduce the cost of doing business in the state. The assistance offered over 14 years shows Big Heart Pet Brands that Ohio is an ideal place for the company to be successful and grow its business," the statement said.